Examination of Witnesses (Questions 120
- 140)
WEDNESDAY 15 SEPTEMBER 1999
MS MAEVE
SHERLOCK AND
MS ALISON
GARNHAM
120. One last question, a factual one. You have
raised a question mark about the proportion of mothers who will
be better off as a result of the changes because of the falling
numbers on income support and you also raise this point about
the trade-off between housing benefit and Working Families Tax
Credit on the maintenance disregard. Have you got any idea about
what your own estimate would be of the numbers who would be better
off if you are not accepting the figures produced by the Government?
(Ms Garnham) We have based our judgment on figures
that came out last year in response to the Green Paper when there
was a parliamentary answer which estimated that something like
90,000 parents with care would get decreased assessments as a
result of the new formula. The majority of them, about 74 per
cent of them, had assessments that were between £30 and £80.
So, in other words, they tended to be the higher assessments that
were being reduced, possibly the better off non-resident parents
who were seeing the reduction. On that parliamentary answer it
was said that half of those losing out received Family Credit,
so they would have been protected to some extent. We are partially
relieved in that Working Families Tax Credit will go up to a higher
level of income, so that may be a higher proportion in future,
but we have not yet got the figures we need to get that information
out. There is some comfort there but there is still a concern
about those who do not get any protection from benefits. For example,
at the moment in the current child support statistics there are
something like 250,000 parents with care who receive assessments
above £30 which will be the new average and about half of
those are not receiving benefits. Again, more of them might be
drawn into the Working Families Tax Credit but some of them will
be left vulnerable to reductions in maintenance payments. That
is something that we are watching very closely.
Mr Dismore
121. Could I ask you about section 7[9]
in your paper on shared care. I think the message there, as I
read it, is that you do not agree with reducing it for the contribution
that the father may make by looking after the child one or two
days a week or whatever. Perhaps you could expand on that. In
answering that perhaps you can say what level or what threshold
there should be before there is some sort of disregard for the
father's contribution?
(Ms Sherlock) Certainly. Obviously the people we represent
are the parents with care and that is our job, whether they are
mums or dads. Our concern, as we said in our submission, is simply
that when lone parents talk to us they say that if, for example,
their son or daughter goes to spend one or two nights a week with
the dad that their costs just do not drop by two-sevenths because,
of course, the parent who is the main carer still has to buy all
the unglamorous things that nobody sees, they pay for the school
clothes, the school books and equipment, the household bills and
they are still paying most of the costs doing that. We are concerned
that simply a pro rata reduction does not reflect that. One has
to be aware that most lone parents are poor and these are very
small sums of money. You really just about get enough money to
keep a household together anyway, if you start to reduce that
at all then that causes a problem. You asked me at what point
would I be willing to see it reduced. I would like to see a separation
between contact and money in the first place because I think they
are two different things. My worry is that I think if Government
is particularly committed to providing shared care, and I would
back it in so doing, I think shared care is important for the
children, it is a good thing to promote, I think the benefits
system ought to pick it up. I would rather see, for example, the
non-resident parent being able to claim housing benefit for a
house big enough to have a bedroom for the children to go and
stay in, otherwise what we end up with is a family living on a
small amount of money and when it splits if you try to run two
houses out of that small sum of money both big enough to be family
homes you are simply not going to have a viable family unit. There
is simply not enough money kicking around, the cake just is not
big enough. Frankly, if we want to make that a reality for the
future that is going to cost more money. Just trying to make the
parent with care manage on less is not the answer.
122. Can I ask you about section 6[10]
and the minimum payment of £5 a week which you cast doubt
upon in relation to income support cases. I am not quite sure
of the logic of what you say in paragraph 6.2[11]
where I think what you are saying is that if the non-resident
parent is on income support they should not pay anything but then
you go on to say we should still give the parent with care an
extra £10 that guarantees the advantage of applying child
maintenance. Presumably if the parent with care knows that the
other parent is on income support then you are creating a circle
of no advantage to anybody whatsoever other than effectively increasing
the benefit bill by £10 a week.
(Ms Sherlock) You could do two things. Normally our
priority is to maximise the income to the parent with care but
because we ourselves have objected, for example, to the benefit
penalty for those lone parents who do not co-operate on the grounds
that you are then asking a family to live below income support
levels, which are supposed to be the minimum on which anyone should
survive, it would seem inconsistent for us to accept that the
same thing can be done to a non-resident parent. I accept the
benefit bill may have to absorb this but if we are going to ask
a non-resident parent to contribute to what is supposed to be
the minimum income on which someone can survive then I think his
benefit payment should be increased to acknowledge that. We are
back to the same point, that it costs more money to run two families
than it costs to run one family. I do not think there is any way
around that. That is what we are trying to get at, badly expressed
I know.
123. The point I am making is there is no point
in going through the whole rigmarole if it is clear that both
parties are on income support. That is the logical explanation.
(Ms Sherlock) Except that some money will always change
hands and, of course, situations change. Even if you are making
a £5 payment to him and he is making the payment across to
her, that establishes payment for a start, it establishes responsibility,
and it gets payments in place which will change as one or other
party moves off income support. I think it is worth doing anyway.
It may sound like a painful exercise but people's lives do changes
and I think the importance of establishing responsibility at an
early stage is still crucial.
124. So what you are saying is his benefit should
be increased by £5?
(Ms Sherlock) That would be one solution.
125. It is just deducted at source and then
paid over automatically?
(Ms Sherlock) Yes. However notional that might be
there would not be any costs if you do that. Otherwise he is having
to pay it out of what is supposed to be the minimum amount on
which an adult can survive and that would seem irrational and
unreasonable.
Miss Kirkbride
126. Going back to what you said about absent
parents being given extra benefit to hand over and also to what
you said about shared care and housing costs, do you not think
it is unfair to the taxpayer and particularly to the low income
families who have two parents in the household who will be paying
extra tax to pay for divorce where both parents have houses big
enough to accommodate families?
(Ms Sherlock) I can understand that the taxpayer might
feel reluctant but my priority is the children. What I do not
want to see is reforms happening in such a way that either parent
is impoverished to an extent that they cannot provide adequately
for their children. I think that the proposals for shared care,
if taken to their logical extent, would impoverish families to
an unreasonable extent. What I said was if the Government placed
a priority on promoting shared care then that could only happen
if they found a solution to the housing problem and one way to
do it would be to enable non-resident parents to have houses big
enough to be able to receive their children. I think that is a
judgment for the Government, it is about priorities. Given the
demand for housing stock, not just housing benefits, I can understand
that there are competing demands for that. In the end our concern
is with the children. If the Government does not wish to pursue
that we accept that, but I think it should then not pursue taking
shared care to the ultimate either because it would then impoverish
the children.
(Ms Garnham) It is also important to see child maintenance
as part of the wider child support package which includes things
like child benefit and other benefits and services. So the ultimate
aim is that children are supported from whatever source. There
may be some implication for the taxpayer in addition to child
maintenance, not every family will have regular or even high amounts
of child maintenance, so you have to see it as a broader child
support package.
127. Given that it is your policy, whether or
not the Government chooses to opt for it, actually creating a
system where divorced parents have access to a big enough house
to look after the children of that relationship is very, very
expensive, not just in housing benefit terms but also the supply
of low cost housing. We see it every day, there are not enough
houses in my constituency for families already, let alone to have
effectively what is a single person living for most of the week
in a house large enough to accommodate a family who would be desperate
to have it.
(Ms Sherlock) With respect, Chairman, I must have
expressed myself poorly. It is not, in fact, our policy to promote
that. We are saying that if A is done B must be done also. Our
view is that if the Government feels strongly enough about shared
care for children, and it appears that is one of the issues that
they promote in the White Paper, then to us one of the logical
consequences of that must be a willingness to invest in steps
necessary to enable shared care. If that is not felt to be a national
priority, and I can understand the argument that it is not, and
I completely take the point you are making, the consequence is
that one must then promote forms of contact other than residential
shared care.
128. What do you think that ought to be?
(Ms Sherlock) If we are going off the point here,
I would go back to what the Lord Chancellor's Department is going
to do about the processes for relationships and marriages that
break down. For me, it is really about trying to assist couples
in the breakdown of relationships in such a way that the relationship
can benefit the child as best it can. Obviously when relationships
break down, things get difficult, but to me the priority would
be helping couples to try to manage the process of breakdown in
as positive a way as possible for the children because frankly
if the parents can talk to each other, they will sort contact
out; they always do. It is where they cannot, they break down
and the state tries to take over that the problems set in, so
to me that would be the priority.
129. Somewhat on this line of what the behavioural
impact would be if you introduced some of the changes you are
suggesting, the benefit penalty, whilst being harsh, if we were
to do what you are proposing to do which is not to have one, then
certainly I have received circumstantial evidence when I have
had discussions with people about the CSA where there would be
a huge temptation to come to an agreement with the absent parent
which is more financially attractive to both the absent parent
and the parent with care, leaving out the CSA for whom there would
then be no penalty by leaving them out, and again it is very unfair
to the taxpayer because the taxpayer ought to be able to expect
that some of the bill for looking after children should be paid
for by the parent and if you have this system, then there will
be a huge attraction to cut a deal without involving the taxpayer.
(Ms Sherlock) To be honest, in those circumstances
if a lone parent on income support cut a deal with the father
and was receiving money and not declaring it, that is fraud and
that is a whole different question. Certainly we are talking about
a completely legal decision to choose not to co-operate because
the lone parent feels it is not in the best interests of the children
because, as they say to us, it has jeopardised the relationship
so badly with the non-resident parent that the non-resident parent
threatens not to see the children and it causes the relationship
within the family to break down so fundamentally that they feel
they cannot deal with the consequences. That is a completely different
question from whether money is actually changing hands and not
being declared and if it is, I think that is fraud and it should
be tackled and I am wholly opposed to any benefit fraud and defrauding
of the taxpayer, but I think that is a different question.
130. I do not think it is reality though from
where we are standing inasmuch as you might actually attract more
violence to the parent with care if the father says, "Look,
I could do so much better if you just take £20 off me rather
than have the CSA come along which is going to take double or
triple that amount", and there will be huge pressure on the
parent with care given that there will be an incentive in the
system to legally not co-operate, but to accept a bit on the side
from the absent parent.
(Ms Sherlock) I think part of our difference is that
we just have to go on what has happened. Under a system where
there was absolutely no incentive to co-operate and a penalty
not to co-operate, lone parents did not co-operate, so we have
tried going out with the big stick and saying, "Well, you'll
get nothing for co-operating, but we will penalise you heavily
for non-co-operation", and still they did not do it. Now,
I think a lot of that is about the attitude to the CSA. Logically
when the Agency was created, it ought to have been, if you like,
non-resident parents who objected because it would cost them money
and parents with care who would have been delighted and they were,
they were delighted it was being created, but a few years down
the road they were coming to us and saying, "I am sorry,
I don't care if you give me £100 a week, but I cannot stand
the impact the Agency has had on my life and our children and
we just can't handle it", and they are willing to accept
whatever penalty to do it and that is certainly the anecdotal
evidence coming to us. It is not, "He is slipping me 50 quid
not to co-operate", but it is actually, "We simply can't
deal with the consequences". Now, in our view, we have got
a chance to completely wipe the slate clean and persuade parents
with care again that it is in their interests for the Agency to
work. The Government, in my view, is doing a lot of very, very
good things; it is giving an incentive to parents on income support
and on Working Families Tax Credit to co-operate by making sure
some of the money reaches their kids for whom it is intended.
It is actually trying to change the entire culture and in that
context I would rather see the carrot waved around and given a
chance before the stick is brought in and that is all we are saying.
131. You have done some work on what happens
in other countries and the guarantee that states give to provide
the maintenance and then collect it from the absent parent. I
just wonder how that really compares because given that the Government's
argument all along has been that this would be too costly, we
are led to believe that there are a great number more single parents
in Britain than there are abroad and I just wonder whether you
could give us an idea of that and how much more of a liability
it would be to the British taxpayer if we were to offer a guarantee
like that which is offered on the Continent.
(Ms Garnham) Lone parent rates vary across Europe.
Places like Sweden and Denmark are very similar to us and UK rates
are below the United States. In some other European countries
the proportion of families headed by lone parents is slightly
lower. I do not know what the costs to those countries are, but
what I do know is that they each have a different regime and some
of them involve passing over a minimum payment but in most cases
they have lower rates of child maintenance in the first place
so they are dealing with lower levels. So we are moving to a position
where we would be likely to be able to implement something similar
here.
Dr Naysmith
132. In your written evidence you highlight
some of the fears you have about the decision-making procedure
and the appeals procedure, like the three-stage business that
is going to be part of it, and also in particular you say that
the appeals will shadow the tribunal service in that there will
only be one person here as opposed to three and you say that this
is particularly important in terms of child support and the cases
we are talking about. Why do you think that is the case?
(Ms Garnham) Well, the new regulations on tribunals
will provide a three-person tribunal if it is a case that concerns
money issues, so, therefore, some of the issues that we are most
concerned about, for example, to do with good cause and the benefit
penalty would not necessarily have a full tribunal and, therefore,
there is much less likelihood that you will have another person
on the tribunal who reflects the gender of the person who is appealing
and you would not have the opportunity of other people's views
and life experiences being brought to bear on the matter. The
possibility is that you could just have a single person and in
most cases, as most lone parents are female, a male tribunal chair
on his own considering questions of domestic violence or emotional
difficulties in the family. That might be fine, but the chances
are that it is not going to be very comfortable and we do not
think it is desirable.
133. So you really would be criticising the
whole idea of one-person tribunals?
(Ms Garnham) Our recommendation is that a three-person
tribunal should be made available for those cases we are worried
about.
134. Presumably the Government would argue that
one of the advantages of such a system is that it would speed
up the resolution of disputes and so on and it is certainly true
that currently in the CSA things can go on for a very long time,
but obviously you think that is not worth having if it is going
to result in unfair decisions?
(Ms Sherlock) Obviously anything that speeded up any
CSA decision we welcome in general. We would like to think that
the new system would be far more transparent and, therefore, there
will be fewer disputes arising certainly about assessments themselves,
although there will obviously be some still. We certainly think
that there are some issues which are fundamental and for the protection
of vulnerable, lone parents, they should have the option if they
wish to appear before a three-person tribunal if they feel that
is the best thing for them in the circumstances.
Ms Buck
135. We heard from Anne Parker, the Independent
Case Examiner, yesterday some anxiety that she had about the discretion
element that was being introduced and you yourself mention in
paragraphs 11.1 and 11.2[12]
the need for both quite limited criteria for departures and for
that to be specifically defined and effectively to limit the level
of discretion. Baroness Hollis, in her evidence, I think was stating
that this would be done in regulations and because of that, that
is the trap in the sense that most of us fell into before and
I wonder if you could just say a little bit about it. You have
stated the warning about it, but what have you got in your mind
about how that might work and how the departures could be managed
effectively?
(Ms Sherlock) It is really a matter almost
of principle. As you rightly point out, the first time when the
Agency was created, fairness was the priority and so an attempt
was made to create a system which would as far as possible reflect
an individual's particular combination of circumstances. Now,
that of course resulted in something that was totally unenforceable
and so having taken the decision to move to a much more simplified
system, we are concerned that you take the decision and then you
can keep making cases of individual circumstances and you simply
start piling back on top layers that you have just stripped away,
so you in fact defeat the purpose. Frankly, going for a percentage
system is rough justice and there is no way around that, but a
decision has been taken that in the interests of money actually
getting to the people who need it most, a system must be found
that is simple and straightforward and I think if you are going
to take that route, then that is the route that you have to stay
with and you need to be careful not to erode the only advantage
of the system which is simplicity.
136. I agree with you, but I am not sure what
that means because the devil is going to be in the detail of regulation
and you say that is clearly defined.
(Ms Sherlock) Specifically we mean that we think a
departure should be limited to costs relating to child contact,
not to the children themselves, not to the circumstances of the
individual because once you start to take into account, "Well,
this guy has got a big house and this guy has got to run a car
because he is out at night", every family has its own particular
combination of circumstances. If there are costs relating to the
children or child contact specifically then I think they should
be taken into account otherwise I think you simply have to draw
a line in the sand and say "this far but no further".
137. You put that into the context we heard
yesterday, that because the whole thing is based on conflict by
definition you have to step outside that and accept the fact that
there is going to be a conflict between the parents, and that
is part of why we are here, and any complex system of allowing
for departures and variations will be just too unreasonable.
(Ms Sherlock) I think it will simply defeat the object.
The one thing we have found out already is there is no point in
having a system that is great on paper if the money does not actually
change hands. The purpose of the Agency is to pay money from the
non-resident parents to the parents and that has to be the yardstick
by which it is judged.
Mr Leigh
138. You spend a lot of your timeI understand
it from your point of viewasking the general taxpayer to
chip in more money, but what about the two-thirds of absent parents
who ten years after the foundation of the CSA do not pay anything
for their children? Why do you not spend more time attacking that
problem and advising us and the Government how we can get these
fathers, it is usually fathers who pay nothing, to pay something?
(Ms Sherlock) Mr Leigh, I shall in future send you
copies of my speeches. I have very strong clear advice for you:
move the CSA into the Inland Revenue, apply just as much energy
to compliance as you do to assessments and you may start to see
money changing hands.
139. Do you honestly think that the Inland Revenue
could make a huge difference to you in relation to these two-thirds?
(Ms Sherlock) Yes, I do. Presumably those recalcitrant
fathers pay their taxes so why should they not pay their child
support?
Chairman
140. I am conscious that all of our witnesses
are beginning to fall into the trap of assuming that the White
Paper is a decided fact but there is a small matter of parliamentary
legislation. I do not say that in any way critically but I think
it is as well to remember that Parliament is still looking at
the detail of this and that is why we are here. Your contribution
this morning has aided us in our contemplation of the recommendations
that we shall make in consideration of the legislative process.
Thank you very much for the work you have done and for your appearance
this morning.
(Ms Sherlock) Thank you for the opportunity.
9 See Ev p 34. Back
10
See Ev p 34. Back
11
See Ev p 34. Back
12
See Ev. p. 36. Back
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